First Nickel Inc.

First Nickel Inc.

March 15, 2005 08:30 ET

First Nickel Inc. Provides Update on Acquisition of Lockerby Mine, Sudbury Basin


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FIRST NICKEL INC.

TSX SYMBOL: FNI

MARCH 15, 2005 - 08:30 ET

First Nickel Inc. Provides Update on Acquisition of
Lockerby Mine, Sudbury Basin

TORONTO, ONTARIO--(CCNMatthews - March 15, 2005) - First Nickel Inc.
(TSX:FNI) ("First Nickel") provides an update on the progress of its
negotiations and due diligence for the purchase of the Lockerby Mine
from Falconbridge Limited (see Release Nov. 29/04).

The non-binding letter of intent between First Nickel and Falconbridge
has been amended by agreement dated March 11, 2005, among other things,
to:

- include the participation by Falconbridge in a private placement of
securities of First Nickel in an amount equal to $2,000,000 provided
that a minimum financing of $12,000,000 for the Lockerby acquisition is
successful;

- reduce the daily care and maintenance costs of the Lockerby Mine to
$5,500 per day effective February 21, 2005;

- remove the one-time option during a period of eighteen months from the
closing of the transaction, for First Nickel to return to Falconbridge
the Property upon payment of the sum of $5,000,000.

First Nickel has entered into collective agreements in principle with
the Sudbury Mine, Mill & Smelter Workers (CAW) and the United
Steelworkers of America and has an agreement in principle with an
adjacent property owner in respect of ore handled through the Lockerby
facility. The transaction remains subject to regulatory and board
approvals to the definitive agreements and the private placements, all
of which are being diligently sought and are expected in due course.

First Nickel, as a result of its due diligence efforts, remains very
encouraged by the exploration, development and mining opportunities in
the Lockerby Mine.

The Lockerby deposit was discovered by Falconbridge in 1962 and the mine
commissioned in 1976. The mine infrastructure includes two surface
shafts down to 1300m depth and an internal shaft from 1200m to 1550m
depth. Design capacity of the hoist is 1 million tonnes per annum. Up
until December 31, 2003 over 8 million tonnes averaging 1.79%Ni and
1.07% Cu were produced. Recent production was from the East and Depth
zones. The mine shut down in September 2004.

As at January 31, 2005 First Nickel had a working capital of $10,618,318
a total of 44,093,013 common shares were issued and outstanding.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    First Nickel Inc.
    Elizabeth Kirkwood
    President & CEO
    (416) 364-6928
    (416) 364-0618 (FAX)
    ekirkwood@firstnickel.com
    or
    Falconbridge Limited
    Denis Couture
    Vice President - Investor Relations
    (416) 982-7020
    (416) 982-7242 (FAX)
    denis.couture@toronto.norfalc.com
    or
    Sudbury Mine, Mill & Smelter Workers (CAW)
    Rick Grylls
    President
    (705) 673-3661
    or
    United Steelworkers of America
    Dan O'Reilly
    Staff Representative
    (705) 675-2461